[gizmo]

I haven't read the entirety of the page, but I think I got the main points. The artist claims he's in the clear because he paid taxes on his income he made by selling NFT artpieces created by him.

However, he gives no indication (as far as I can tell) that he has any kind of information on his customers. Does he have invoices? Did he collect name, address, and phone number for each customer? Did he make a reasonable effort to see if his customers were not obvious crooks? He published transactions from various crypto chains, but that doesn't prove anything except that crypto transactions have taken place.

The author rants extensively about how corrupt and illegal the government's actions are, but he provides no evidence that he conducted his business in a serious and professional way. He feels like his actions should be legal, but it's not obvious that he hasn't inadvertently facilitated money laundering. After all, if he's a popular NFT artists then people with illicitly gained crypto could easily have been trading his NFT art to launder their money.

I think it's pretty likely that much of last year's NFT bubble was the result of scammers/fraudsters/ponzi operators looking to obscure the source of their new wealth, and this guy happened to be a big beneficiary of it.

[etrautmann]

I'm not sure your argument makes sense - Does conducting your business in a serious way as an artist involve finance-levels of know-your-customer regulatory compliance? Most business, aside from finance, do not know much about who's buying whatever product they're selling. Individual artists shouldn't be on the hook to do background checks on art buyers.

<edits for clarity>

[closewith]

With respect, since the introduction of AML5, art dealers and auction houses are subject to KYC/AML requirements (as so-called "high value dealers"). If the transactions exceeded €10,000, the company would be obliged to be compliant or, as many do, hire a dealer who is compliant to act on their behalf.

[chrismcb]

But why? I realize that there is an arbitrary 10000 number that governments use to spy on it's people. But why? Why should the people follow these insane rules? In the us this is potentially unconstitutional unless it is interstate trade.

[closewith]

I am not a fan of the ever increasing state surveillance of private transactions, so don't expect a justification from me.

Presumably €10,000 is the trade-off value which the member states decided would be sufficient to make an impact on money laundering without imposing too much bureaucracy on small transactions.

> Why should the people follow these insane rules?

I don't necessary like them, but AML 4/5/6 are well-reasoned Directives that were written and negotiated in public and agreed on by all member states. They didn't receive much pushback during their drafting periods. If anything, leaks like the Panama Papers have made them popular.

As for why people should follow the law, that should be obvious. The state won't leave you alone to transact as you wish. Compliance failures lead to civil and criminal sanctions.

> In the us this is potentially unconstitutional unless it is interstate trade.

Fortunately, the EU is not in the US.

[muffinthem]

This is not fundamentally possible in peer to peer permissionless blockchains. The law as it is currently defined is not compatible with the technology and will need to be revised if the law wishes to consider NFT as high value art sale.

[closewith]

> This is not fundamentally possible in peer to peer permissionless blockchains.

That's nonsense. There's nothing preventing KYC for any business transaction. It won't happen on the blockchain, but entities operating in the EU who forgo compliance will end up subject to investigation when they interact with the financial system, as may have happened in this case (again, I'm not supposing that the OP did anything wrong).

> The law as it is currently defined is not compatible with the technology and will need to be revised if the law wishes to consider NFT as high value art sale.

This is complete nonsense. The medium of transaction is neither inherently compatible or incompatible with the law, and entities which try to use it as an excuse to avoid their compliance obligations will find themselves subject to government investigation and sanction.

The idea that you can pretend that a technical implementation can exempt you the law is so outlandish and absurd that I wonder if you're trolling?

[muffinthem]

I am not saying KYC is not possible - I am saying the requirement that the seller does KYC - such as an invoice with customer details - on every transaction is not possible. Once an NFT is listed for sale through a permissionless contract, there is no way the seller can block a particular buyer, or demand an invoice or their private details before or after the sale. The buyer's tokens may have originated from a KYC-d exchange such as Coinbase or Kraken, but that information is not available to the NFT seller, and this is where the problem is with the OP website.

> The idea that you can pretend that a technical implementation can exempt you the law is so outlandish and absurd that I wonder if you're trolling?

I am not suggesting this exempts anybody from the law, I am suggesting the law is outdated and not compatible with current technology. If the law is that you must handle KYC upon receiving $10K USD in tokens, and an anonymous wallet sends you 10ETH in tokens, you should not automatically become a criminal and have your assets seized because of a law that was written before permissionless blockchain networks existed.

[malfist]

Designing something that breaks the law, does not mean you don't have to enforce the law, or that the law needs to be updated and "made compatible"

If I sold a car that was deliberately unsafe, I wouldn't expect people to come to my company's defense and say that being safe in my car isn't possible and therefor the law is outdated and not compatible with current technology.

[closewith]

What you are describing is the use of permissionless contracts to avoid AML/KYC compliance law, which is partly what the Directives are designed to criminalise.

> I am not suggesting this exempts anybody from the law, I am suggesting the law is outdated and not compatible with current technology.

AML 5 came into law on the 10th January 2020 (with an enforcement window for transposition into national laws). The law is, as said before, partly designed to close loopholes in the previous Directives that allow high-values transactions to avoid regulation. The law is - for better or worse - keeping up to date. It's simply the case that you don't like the regulation being imposed.

> If the law is that you must handle KYC for > 10ETH purchase, and an anonymous wallet sends you 10ETH in tokens, you should not automatically become a criminal and have your assets seized because of a law that was written before permissionless blockchain networks existed.

I think this really puts your bias front and centre.

[gizmo]

As a business you have to issue invoices and you also have a responsibility to stop obviously criminal behavior.

A car dealership can’t sell somebody a Lamborghini if they want to pay with crumpled $20 notes. An art dealer can’t buy a Mondrian that the seller claims they found in their granny’s attic.

I don’t understand how this is controversial.

[etrautmann]

Neither of your examples seem obvious or objectively criminal, or uncontroversial for that matter. If you pull back from Lambo to a Civic, is this still obviously criminal?

classifying suspicious transactions is a weird and dangerous path to legislate.

[fragmede]

Except that we're already there.

Domestically, cash above $10k is already subject to a reporting requirement, a new Honda Civic is $22k, and that much cash has been deemed suspicious due to the war on drugs.

[muffinthem]

Getting customer invoices per transaction is fundamentally not possible with the blockchain and peer-to-peer payment networks. What you suggest is that every individual and corporate entity who has sold a NFT should also be treated as criminal and have their assets seized, because they are not able to provide purchaser invoices per sale?

His records and sales are public on the site and easily traceable, far more transparently given than most corporate and celebrity NFT sales that have happened without issue in the last two years.

[chrismcb]

Why should he did any of those things? Why is it his responsibility to make sure his customers are not crooks? Why does he need to get any info from his customers? Why does he need names, addresses and phone numbers?

[em-bee]

it is his responsibility.

money laundering laws in germany require banks to verify every transfer above 1000 euro. cash payments of more than 10000 euro need to be documented as well.

i believe the rules are similar across the EU.

what's unclear is how that relates to cryptocurrency. does the source of the cryptocurrency have to be verified, or just the source of the fiat currency when cryptocurrency is sold for?

[closewith]

I know you're looking for idealogical reasons, but the answer is because it's the law of the land and failure to do so will result in state sanction.

[rez8]

This is a braindead take.

A bar that takes cash cannot prove they're not money laundering, therefor it doesn't matter if the government seizes their assets. That is essentially what your argument says.

It's obvious you're not on board with NFTs, and that's fine. What isn't fine is making blanket assumptions that everyone who sells art in the space is a fraud or a scammer. It's a very stupid opinion, with no basis in knowledge of the space, the ability to track transactions, due process, etc.

[gizmo]

A bar can prove that fairly easily. Show expenses, show receipts. Show auditors that the place is packed every weekend.

This isn’t about honest businesspeople having to meet some impossible burden of proof. This is about selling 10 million worth of product and not bothering to figure out where the money came from.

[muffinthem]

The author is showing expenses and receipts of purchases. They are extremely clear and in some cases easier to track to owners than dollar bills. A bar selling alcohol for dollar bills would have a far thinner paper trail than what this author is providing.